Why is Bitcoin relatively under pressure amid record-breaking gains in precious metals?

Source: BlockMedia Original Title: Gold Axe, Silver Axe, Bitcoin Axe… Who Will Be the Next Star in the Precious Metals Rally? Original Link: https://www.blockmedia.co.kr/archives/1035634

Record-breaking Gains in Precious Metals Outperform Bitcoin

Falling interest rates and “concerns over fiat currency devaluation” are driving the rally in precious metals

Since the beginning of the year, the rally in precious metals has continued to heat up. Some believe that the global financial markets have entered a massive “super cycle” dominated by precious metals.

On the 23rd local time, gold futures prices in the New York market approached the $5,000 per ounce mark, hitting a record high; silver prices broke through $100 per ounce for the first time in history, recording a significant increase.

While traditional safe-haven assets are reaching record highs, Bitcoin, often called “digital gold,” appears relatively neglected, with market attention increasingly focused on its future trajectory.

The main driver of this upward trend is undoubtedly the possibility of Federal Reserve rate cuts and concerns over dollar depreciation. Although the Fed may keep the benchmark interest rate unchanged next week, the pressure from the Trump administration to cut rates is unprecedented.

Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, helping to push prices higher.

Additionally, “devaluation trades” (bets on currency devaluation) have ignited market enthusiasm. The Trump administration’s tariff threats, concerns over the Fed’s independence, and the US’s massive national debt have shaken investor confidence in the dollar, leading large capital flows into store-of-value assets—gold.

Silver Breaks $100, Signaling Liquidity Diffusion

Notably, after gold prices surged alone, silver prices responded explosively. Silver spot prices broke through $100 per ounce, reaching a new high. Silver’s price is highly correlated with gold; the surge in gold prices has driven investment demand and industrial consumption, coupled with long-term supply shortages, jointly pushing silver prices higher.

Experts interpret silver’s delayed surge as a sign of liquidity diffusion. Previously, buying pressure focused on gold due to rising prices, shifting toward relatively undervalued alternative assets, forming a “rotation” trend. This also offers important insights for other alternative assets like Bitcoin.

Bitcoin Is Historically Undervalued Relative to Gold

While the precious metals market is hot, Bitcoin remains relatively weak. The BTC/XAU ratio has fallen to about 17.9.

Considering that during previous strong periods and at the peaks of 2024–2025, this ratio was at 30–40 times, Bitcoin is indeed in a historically undervalued zone relative to gold.

Gold achieved astonishing returns of 27% in 2024 and 65% in 2025, continuing its upward trend, while Bitcoin failed to keep pace, intensifying the “decoupling” phenomenon.

Bitcoin Needs to Break Free from Tech Stock Correlation to Prove Its “Safe-Haven Trust” Status

Market analysts suggest that Bitcoin may experience a “catch-up” rebound, narrowing the gap with gold in the future. The core factors currently driving gold prices—“liquidity supply (rate cuts)” and “distrust in the fiat system”—are also the main logic behind Bitcoin’s rise.

Just as silver follows gold’s gains, Bitcoin has also formed an environment conducive to low-cost buying.

However, for Bitcoin to gain genuine recognition as “digital gold,” it must overcome a hurdle. Recently, investors have shifted funds from overvalued stock markets (especially the “Big Seven” tech stocks) into gold.

If Bitcoin remains highly correlated with tech stocks and is classified as a risk asset, it may not fully benefit from the safe-haven sentiment.

Ultimately, Bitcoin’s rebound prospects depend on whether it can share the status of “trust substitute” with gold. Given a favorable macroeconomic environment, if Bitcoin can break free from its correlation with tech stocks and restore its narrative as an inflation hedge, the currently low BTC/XAU ratio will present an attractive rebound opportunity.